Chinese Company Wins Auction for Failed Obama-Backed Electric Battery Maker
A Chinese company has won an auction for an American electric car battery company partly financed with a $249 million taxpayer-funded government grant.
Last week, Wanxiang, one of China’s largest non-government-owned businesses, won the auction for failed battery maker A123 Systems with a $260 million bid.
In September 2010, President Barack Obama lauded the green energy company on a phone call for A123's grand opening:
"You guys are making us proud," said Mr. Obama at the time. "The work you're doing will help power the
American economy for years to come. And so everybody there should just
feel very, very good about what you guys are doing. And I am looking
forward to continuing to see the great work that you guys do in the
years to come."
Now that the Obama-backed green energy company has failed, the U.S. government must sign off before a grant can be transferred to a new owner. That means A123’s remaining $120 million in taxpayer-funded grants could potentially end up in Wanxiang’s hands.
Also of major U.S. concern is the fact that a portion of A123 worked with the U.S. Department of Defense:
Wanxiang's approach for A123 had stirred a political storm and one U.S. politician was quick to warn about A123 and its sensitive, U.S. taxpayer-financed technology falling into the hands of a Chinese company.
"Given the thin line between Wanxiang and the Chinese government, I am concerned about the government of China having access to sensitive technologies being used by our military forces," said a statement from Congressman Bill Huizenga, a Republican from Michigan where A123 has plants.
The sale did not include parts of A123's business that works with the U.S. Defense Department, a source close to the deal said. That portion of the company went to another bidder, which the source did not identify.
Whether the U.S. government approves the Wanxiang auction remains to be seen. In the interim, however, Wanxiang will continue making its roughly $1 billion supplying parts to bailout recipient General Motors and Ford Motor Co. The Chinese company has also snatched up or invested in over 20 U.S. companies, many of which are now in bankruptcy.